Why does equivalization matter? An application to the monetary poverty in the sustainable development goals framework

Gregorio Izquierdo Llanes () and Antonio Salcedo Galiano ()
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Gregorio Izquierdo Llanes: UNED
Antonio Salcedo Galiano: UNED

Quality & Quantity: International Journal of Methodology, 2023, vol. 57, issue 3, No 29, 2575-2589

Abstract: Abstract This study analyses empirically the effects of applying the OECD modified scale to the household income in order to measure the monetary poverty, which is a headline indicator in the framework of the UN sustainable development goal. We find that the reduction in the number of household consumption units derived from using the OECD modified scale, that is a standard in the EU, transforms the distribution of the disposable income to the right, raising the risk of poverty threshold per inhabitant, especially in households with fewer members. In contrast, the application of a per capita scale offers a higher degree of temporal link with the population rate in severe material deprivation, and it also prevents a disposable income transformation that introduces breaks on the left side of the distribution by type of household, showing a satisfactory soundness and reliability degree when estimating the proportion of people and households with a higher level of vulnerability.

Keywords: Disposable income; Equivalence scales; Material deprivation; Risk of poverty; Sustainable development (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s11135-022-01477-8

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